Mark Leonard and Schade Towers LLC, the company he formed to own and redevelop the former Schade Brewery building on East Trent Avenue here, have filed suit in Spokane County Superior Court against United Security Bank, of Spokane.


In the suit, Leonard claims that even though he and Schade Towers have obtained tenant lease commitments required by United Security to finance the project fully, the bank has breached a promise to loan Leonard additional funds so that he could complete the Schade renovation. Now, the suit says, the project has lost most of the lease commitments it had obtained. Leonard and Schade Towers are asking the court for unspecified damages.


Duane Brandenburg, the banks president and CEO, declined to comment on the suit.


In the complaint, Leonard says he first met with the bank regarding the possible purchase of the Schade building in August 1997. At that time, United Security held the mortgage on the Schade building and was preparing to foreclose against its former owner via a trustees sale.


The suit alleges that United Security agreed to loan Leonard all funds necessary to renovate the property if he was willing to pay the $900,000 owed on the mortgage by the prior owner rather than buy the building for fair market value, which was between $300,000 and $400,000.


As a result of the agreement, United Security agreed to loan Leonard the $900,000 he needed to buy the building, as well as $2 million to begin the renovation of the building. In the suit, Leonard asserts that at that time, neither he nor the bank knew how much it would cost to renovate the building, and that the bank was unwilling to delay the trustees sale to give him time to seek construction bids for the project.


Leonards suit says that after he agreed to pay the $900,000, renovation bids were received in early 1998, and the bank was notified that it would cost at least $4.8 million to develop the Schade building to the build-out phase, which means that leaseable space in the building would be ready for tenant improvements. It says that United Security continued to advance money to Leonard and Schade Towers and said it would loan all the funds necessary to develop the building to the build-out phaseand once lease commitments were signed, it would loan additional funds necessary to complete the project.


Leonard claims that this past spring and summer, he and Schade Towers obtained the lease commitments required by the bank, but so far the bank has refused to loan them additional funds. The suit didnt specify what percentage of tenant commitments were required by United Security.


Leonard says the building now is at the build-out phase, and four tenants currently occupy space there.